In the elderly, depression sometimes is characterized by the symptoms of impaired memory, intellect, and orientation also seen in dementia. This "pseudodementia" poses a significant diagnostic problem. Recent reports that the latency of P300, a component of the event-related potential (ERP), is considerably greater than age norms in demented patients but not in depressed patients suggest that this direct measure of brain activity may have diagnostic utility. We propose to confirm these findings and also examine the potential diagnostic utility of other ERP and electroencephalographic (EEG) measures. We will establish norms for a number of ERP and EEGmeasures from three age-sex-, and educationally-matched groups of elderly people: (1) with no evidence of dementia or depression; (2) with dementia but no evidence of depression; and (3) with depression but no evidence of dementia. Research Diagnostic Criteria for Major Depressive disorder and Diagnostic and Statistical Manual III critieria for Dementia will be used to define the groups and all subjects will be thoroughly evaluated by medical examination, the Schedule for Affective Disorders and Schizophrenia (SADS), and the Luria-Nebraska neuropsychological battery before being assigned to a group. In the second stage of the study, we will use those ERP and EEG measures which discriminated between depressed and demented patients to separate a sample of patients whose diagnosis is uncertain. An ERP-based diagnosis will be made for these patients, all of whom will be treated vigorously for depression and evaluated at six-month intervals. The diagnostic accuracy of the ERP measures will be assessed in terms of treatment outcome: Improvement confirming a diagnosis of depression, and deterioration confirming a diagnosis of dementia.